Kojo Oppong Nkrumah, Information Minister The Government of Ghana has terminated the Concession Agreement with the Power Distribution Services (PDS) Limited over the take-over of the assets of the Electricity Company of Ghana (ECG) for distribution of electricity in the southern sector of the country.
The move was necessitated by a forensic audit conducted by the Millennium Challenge Corporation (MCC) and Government of Ghana’s investigations into the issuance of Demand Guarantees for the Concession Transaction, which revealed that the Payment Security for the Transaction was invalid.
The investigations re-affirmed the earlier report that, there was no approval by Competent Signatories to the Demand Guarantees issued by Al-Koot in Qatar, therefore, the Transaction lacked the required authorisation and approval of the Company.
More so Al-Koot has an underwriting policy and guidelines which required the approval of the Central Bank of Qatar, but no such approval was granted by the Central Bank of Qatar.
In view of that, President Nana Akufo-Addo and Chief Executive Officer of the MCC, Mr Caircross agreed that the existing Concession between PDS and ECG, which involved the transfer of the latter’s assets worth three billion dollars should be discontinued, while a suitable replacement was sought before December 31,2019.
A statement issued and signed by Mr Ken Ofori-Atta, the Minister of Finance, in Accra, said the Government of Ghana remained strongly committed to the Ghana Power Compact and the Private Sector Participation (PSP) of the country’s energy sector.
“We also wish to reiterate the position communicated to the CEO of the MCC by the President of Ghana during their meeting on the sidelines of the United Nations General Assembly in New York on September 23rd to the effect that, the current concession had to be terminated in view of the facts uncovered regarding the failure by PDS to satisfy conditions precedent under the relevant transaction documents.
"However, every effort would be employed to ensure a suitable replacement within the relevant timelines in order to complete the Compact," it said.
It said the Government’s decision to terminate the PDS Concessions was based on two key points, thus the meeting between the CEO of MCC and President Akufo-Addo on September 23, in New York, USA, produced an understanding that the existing concession would be discontinued and a concession restoration and restructuring plan would be executed within existing timelines before December 31, 2019.
Secondly, the facts uncovered by the forensic audit justified the discontinuation of the current concession, but […]